Which Is Better – Renting or Owning?

There was a time, not too long ago, that owning a home was an absolute must-have stepping stone on the way to the American Dream. The collapse of the housing bubble in 2008 changed all of this. According to a 2013 survey, about 54% of Americans now believe that renting a home is more appealing than buying a home. Other shifts in the way we live have suppressed our appetite for plunking down a huge chunk of money and signing a mortgage. Americans are now more likely to move away from their hometown in search of work and may expect to eventually make another long-distance move again for the same reason.

The fear of putting down roots and the uncertain housing market may have put a damper on the number of enthusiastic homebuyers out there, but those things certainly haven’t eliminated them. Whether it’s better to rent or buy depends on your personal situation as well as the housing market in which you’re looking to buy. Let’s have a look at some of the pros and cons of renting vs. buying, taking those factorsinto account.

If you’re considering buying, the first thing to think about is what you want out of a home purchase. The reason buying was so popular after WWII was because many people could buy a home cheaply while they were young, watch the house appreciate in value over the years, and then sell the home in retirement or pass it along to their children. That is no longer the case, at least not everywhere. If you’re looking at a home purchase through the lens of this outdated model, be sure to do your homework on how home prices have fluctuated in the area in which you plan on buying. Buying a home or apartment can certainly still be a wise investment that eventually pays off – it’s just not the guarantee it used to be.

Another thing to consider is how much work you plan on doing yourself. If you fancy yourself a handyman, buying a fixer-upper at a good price might work out in the end, especially if you have some extra cash for regular maintenance and repairs. If DIY work sounds like a nightmare to you, renting an apartment with a building super is probably the right move. In fact, if you’re moving to an apartment in NYC, you have some measure of protection under the city’s tenant’s rights laws, which wouldn’t necessarily apply to you as a homeowner.

For a comprehensive look at your situation, check out this great interactive calculator from the New York Times to give you an idea of which option is better for you. The calculator takes many factors of a potential home buying scenario into consideration—such as the cost of the home, how long you plan to stay, and your down payment—and then crunches the numbers. Using your info, the calculator will tell you that “if you can rent a similar home for $XXX.XX dollars per month, then renting is better.”

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